Why Scandal Won't Touch Capital One Campaign

Bank's Chief Consumers Are Unlikely to Even Know About It and May Even See It as a Benefit

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There's $210 million less in Capital One's wallet following its settlement related to federal charges of deceptive marketing tactics.

It may seem like another black eye to the financial-services company. But in reality the scandal is unlikely to change the way the financial-services giant markets.

The bank failed to adequately monitor activities of third-party credit-card vendors, which were pressuring or misleading consumers into paying for add-on products such as payment protection and credit monitoring when they activated their credit cards.

"When we became aware of this issue [at the end of 2011], we took prompt and decisive action to address the problem," said Pam Girardo, a spokeswoman for Capital One, in an email. "We immediately stopped all phone sales of the product, terminated our vendors' ability to sell the products and began work to identify impacted customers to provide full refunds." Going forward, Ms. Girardo added that Capital One is now "strengthening and enhancing its quality controls and oversight of vendors to ensure this doesn't happen again."

Since Capital One is viewing this third-party vendor issue as an isolated problem, the company won't go further and proceed to a larger overhaul of its marketing and advertising to change its image.

"If their big goal is to maximize profit, then they'll stay with what they've been doing," said Susan Waldman, partner in strategic services at branding firm ZilYen. "They seem to be satisfied with it and don't have any further desire to be an organization that stands for more than that ."

Jim Garrity, CEO of marketing consultancy firm BridgeTwoWorlds and former chief marketing officer at Wachovia, said that Capital One's target audience, which he sees as younger men with a lower level of education and income, isn't very likely to be aware of the settlement news. Therefore the damage to the brand is likely to be minimal and the need to change marketing practically null. Mr. Garrity added that the Capital One customers affected by the deceptive-marketing practices will end up collecting close to $100 each. "I doubt they're going to hate it," he said.

In addition to Capital One's recent settlement, the financial industry has once again been drawing negative headlines following a wide range of recent scandals, including rigging interest rates and antitrust cases involving credit-card companies.

So what's one more? "People at this point don't expect banking to be an easy experience," Mr. . Waldman said. In fact, she thinks that banking has become so much of a commodity that Capital One's massive advertising budget—the company spent $412.5 million in measured media last year, according to Kantar—is helping the company set itself aside and effectively create a reputation as a personal bank. "They use humor, a more personal delivery and they project a simpler experience," she said. "People are receptive to that ."

That humor is credited in large part to advertising from the bank's creative agency, KBSP, New York, which declined to comment. But Alec Baldwin, the celebrity spokesman who will continue to appear in commercials for Capital One, doesn't seem to see any reason to distance himself from the company, as long as he continues to use his paycheck for good causes. His publicist declined to comment on the federal charges against Capital One, but he was quick to mention that Mr. Baldwin has donated all of his proceeds from the Capital One campaign, which represents more than $5 million, to various charities supporting the arts, including the New York Philharmonic.

In a press release July 18, Capital One said it has set aside $150 million to provide refunds to customers and that it will pay $25 million in penalties to the Consumer Financial Protection Bureau, as well as $35 million in penalties to the office of the comptroller of the currency.

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